Dear Members

I think many investors have written South Africa off due to the recent price increases since 2003. But I still think that there is a LOT of potential still to come.

Reasons are as follows:

1. The emergence of a black middle-class known as 'Black Diamonds'.

2. The 2010 Soccer World Cup.

3. The ratio of Disposable Income to Household Debt which is still only at 76%

4. 93% of Land Claims by the have been completed.

5. Interest Rates are still at 25 year lows from a height of 25% in 1998.

Anyone agree / disagree?

disagree the country is getting more and more unstable..

North Africa has better potential, namely Morocco plus it's only a 3 hour flight.

Wait until SA hosts the Best Soccer World Cup yet in 2010

By then it would be too late to invest.........

Sent a client of mine down to view a couple of places and have an extended hol before making her mind up to move permanently. She had always dreamed of living there.
I have a SA guy who works with me from time to time and he had tried to explain the perils of every day life there to her but to no avail.

Well, she found out he was not exagerating a bit. Each prop was in a compound, electronic gates and most with armed security and warnings never to go out at night alone and without your gun. Sounds almost as violent as Manchester!

Now I have never been to SA and have never had any overwhelming urge to visit so I cannot relate to this as a way of life.

My client is coming back next week having had a wonderful holiday but her mind made up not to move out there. Can't say I blame her.

Now don't come back slagging me off - I am merely passing on the views of a South African whose home is now in the New Forest and had no desire to return to his homeland and a visitor who has had her dream cruelly shattered.
l

i am from the north of Ireland, .....i left Ireland in my mid 20's to work in South Africa.......

...Belfast was is a kids party compared to Johannesburg.....
Durban held the title as murder capital of the world, that year and retained the title for several years since i was there...

...anyone who tells you different is talking c**p......and is probably just trying to sell you property there......

since the "new" government took over crime has shot (excuse that word) through the roof...in fact, when i was there the prisions were full and the brainwave they come up with was to release everyone and start again......the place went mad...stories of the previous days deaths in one of the local newspapers when from 1 page to 3 pages...in the space of a month....

Capetown has a very dangerous area just outside the city called the "cape flats"......prob one of the worst places in the whole country.....

dont be buying a place there when you can buy somewhere much safer and closer to home..if you have kids then there is no way you would relax out there.....

thailand or somewhere would be a much nicer place to buy in....once the politics is sorted out...

ps. belfast is a great place now, actually very like disneyland with alcohol...*hic

I am working for an estate agent in Fortaleza, Brazil and have just struck up a partnership with a South African estate agent. He believes there will be a lot of demand from South Africans buying property abroad as many South Africans with a bit of money are looking to get out of the country because of the way the current government is letting the country go to the dogs.... crime especially.

The government have a lot of work to do if they don't want the 2010 World Cup to be the most dangerous ever from a spectator point of view.

gmb - I'd like to talk to you. See your private messages.
Thanks Lewis

Lewis, I tried contacting you but had my emails returned undeliverable and can't send PM's on this thing for some reason?

In the first place, this South African living in New Forest is obviously trying to justify his decision to stay in the UK, rather than go back in South Africa. If you get him drunk and then ask him........he'll probably tell you that he misses home more than he cares to mention.

And as for the lady who went to visit SA, she probably had the time of her life and is afraid to tell you that, so as to avoid getting berated by persons who have not yet visited the country.

South Africa, with all it's problems WILL still host the best Soccer World Cup EVER !! Mark my words

Its going to be a great world cup. meanwhile SA wil continue turning into the new Zimbabwe

Don't always believe what you read in the newspapers.......

Two words: Jacob Zuma
Read the news and take the risks.

At the moment, everyone is jumping into property in SA. It's probably a little behind in terms of the bubble but holiday home values are on a par with those in UK. I don't think that there is much growth potential left, but it's going to take more than a credit crunch to dent the SA market - SA produces real things that tend to do pretty well regardless. So look carefully at the political situation and take your chances with Zuma.

I looked at S Africa 5 years ago. I had the opportunity to work there for a couple of months & it was being touted then as the "next hotspot"...so you can be sure I took advantage to research it from a property investment standpoint whilst I was on the spot!
I found some wonderful properties around Capetown and to the south of the city...ranging from stylish seaside apartments to gorgeous countryside properties. The countryside is absolutely beautiful...staggeringly so in parts and the prices were incrediblely cheap especially as the exchange rate then was very good. BUT we didn;t buy there. During my stay, I also noted the following:
1. High AIDS/HIV rates that were being ignored by the government & which apart from the human tragedy, in the future could spell disaster for potential economic growth
2. Pockets of high levels of violence, Joberg & Durban apart, we were warned not to stand in the street after 5pm in the evening in the business district and to ensure that our card doors were locked at all times when travelling.
3. Many properties advertised "panic rooms" - secure areas of the house where you can retreat to if broken into and "sit it out"
4. General unease as to what the future might bring, post Mandela, (the goverment wasnt exactly covering itself with glory at the time)

We are not professional investors, we only invest in places where we would be happy to live...and sadly SA, lovely as it is, was not it.

Having lived in South Africa (Joburg) for 12 months, I would not consider touching anything there until after the next elections.

Great country, but blighted by the problems in the post above.

Jo'burg (Even the very richest commerce centre- Sandton) was not safe to walk about in after dark, and only a few streets are safe during the day.

The only area I know of where it is remotely safe to walk around in the streets is Parkhurst, but it is very expensive, and I didn't feel particularly safe there.

Cape Town is less of a crime hotbed, but prices in the 'safe' part of the city are 'toppy', and the political uncertainty makes it a no-go for me.

Anyone buying property in SA is a f*cking idiot.

I don't know about the exact above figure, but I do know that many SA figures are skewed becasue approx half of the population have no income or very little

If you took the household debt of the whites, coloured people with decent jobs and the black diamonds, I would suspect it would be double that figure????

I believe South Africa has a lot of energy problems at the moment, that the current government shows little leadership over and will probably continue to get worse.

Prices have risen there a lot there, but i wonder how much of it has been speculative, i know some telly shows over here have been pushing it. I personally wouldnt go there, mainly because of AIDS and crime and id imagine that would limit its appeal.

This answer is short and to the point, but would you care to elaborate on why you have this view?

Whilst I do have several reservations about the Country (Government appear to be even more corrupt/incompetent than in the UK, violent crime, energy problems etc), I bought a 2.5 acre plot of land out there with a view to moving out and developing it in time for the 2010 Soccer World Cup. The value of this land seems to have increased by 50% over the past 18 months (if dealing with their local currency of ZAR). House prices aren't going up as fast, but land does seem to have performed well.

The UK value of the land, however, hasn't done so well as the value of the ZAR has gone down by 20% or so over the same period. This wasn't a problem, as my wife is South African and my Father-in-law bought the land in our name in Rands anyway.

The SA housing market is very quiet but there doesn't seem to be the same expectation there of having a big crash like what people are forecasting in the UK. I'm thinking it could be a good time to sell up in the UK and develop the land now, since the pound is relatively high against the Rand.

If things do go pear shaped there, then I should still be able to come back to the UK in 2011 and buy a better house for the same price as the one I will sell this Summer. That's assuming I can find a buyer for my UK house!

i'm a s africa bull - don't really see a world cup play, but think a prolonged commodities boom will be the driver.

Why do people set such store by sporting events that last for a few weeks?

So, in summer 2010 loads of football fans visit S.A. for a week or two: hotels, restaurants and especially bars do a roaring trade as fans get pissed and celebrate or drown their sorrows.

Then they all go home.

Why on earth does this affect long-term stuff like the property market?

Same with the Olympics.

Don't believe the hype.

Agreed. SA is great for a holiday - I've had 2 lovely ones, and other half has spent a lot of time there on business, but wouldn't want to live there. House alarms are one thing but would hate to have massive alarmed security gates round the garden and have to lock/unlock every time I went out. Also find the contrast between great wealth and eg the Cape Flats disturbing. Don't anybody tell me it's the same here - it isn't.

Kingsgate

For someone who has over 4000 posts, I expected a better post from you. But I guess reading someone else's rhetoric and regurgitating it works for you......

It's not the tournament itself that will benefit South Africa the most, but it's the 'exposure' that the country will get from the world wide audience watching the tournament.

Perceptions will change about Africa due to its ability to host the biggest Event in the World, and people will start to see that it is a viable investment destination.

And for the sake of people actually wanting to enjoy a wonderful tournament, I hope for everyone's sake that you don't attend.

i think perceptions are already changing, what with the recent wave of (government orchestrated) violence sweeping SA

it's only a matter of time before they turn the mobs loose on the whites

we will soon come to see SA for for what it really is; an ungovernable mess like most of sub-saharan africa

That is assuming they get the power cuts sorted out.

I can't believe I'm actually reading this crap. Believe me the mobs have been loose on the whites and every other colour including their own people for the last decade or so. Power cuts, for days on end!!!! Load shedding. What next. Oh yeah, water shortages. Oh, housing crisis because a huge chunk of the population wants to leave and there are no buyers, perhaps?!

Criminals are going to descend like flies during the world cup. It will be a showcase for sure, it will be an embarassment for SA, hopefully the football will be good though. The government is a laughing stock and every corner the country turns is further toward anarchy, poverty and lawlessness. The atrocities committed against all races in South Africa are so inhumane, so beyond human comprehension that those who have not experienced them, choose to believe that they are exaggerated or that "crime happens everywhere" or "It's not as bad as what some Saffers say". That is the sadness, that the unimaginable happens on a daily, hourly basis and the most horrific of crimes don't even make page 10 of the local rag.

South Africa as an investment. Anyone that is considering this, clearly needs to do some more homework.

You are dead right. Anyone who is white considering buying in SA is insane. The only good play in SA may be shares in a couple of comodity ETFs or similar done at a safe distance.

The rising interest rates and a slowdown in the economy is causing residential building cost inflation to continue to slow, reflecting the slowing of the residential market. According to the latest FNB commercial property finance residential building cost index, which was constructed by construction industry consultant Industryinsight, recorded y/y building cost inflation of 23.6% for the second quarter of this year. FNB property strategist John Loos said that this was a further decline from the revised 29% registered in the first quarter of this year.

If you have a taste for SA at the moment you might want to consider what my old landlord is going to do. He is sitting on his money patiently waiting for Robert Mugabe to relinquish power in Zimbabwe.

He claims that besides the obviously enormous economic problems, it doesn't seem to suffer the same sort of social problems that SA suffers from.

I'm not sure about this strategy Rob. There are still thousands of people leaving (or attempting to) leave Zimbabwe and enter South Africa. Also remember that Mugabe doesn't allow the BBC and other foreign reporters into the country. If South Africa is a bit risky, then investing in Zim must be at least 5 times worse!

If you do take a risk and it pays off, then things could pay off big-time. There certainly won't be a stampede of people buying in Zim, but foreign money could probably buy a lot of real estate there - the trouble is most farmers lost their land in Zim as it was taken off them (using violence) by the Mugabe government. What is to stop the same thing happening again once farms are bought and up and running again? Of course, if things do settle down in Zim it will the people who get in there quickly that will make all the money.

At least the SA government has some form of democracy and has a land registry system like the UK. The land claims by the black population are being settled in court, rather than by violence. I do think SA is a bit unstable and could go either way. I've been looking at businesses for sale and there are loads - mostly up for sale by people who are emigrating! This does show that the white population are leaving the country. On the other hand, this gives brave investors the opportunity to buy land/property/businesses there at a good price. We'll just have to see what happens after the 2010 World Cup.

Reading this, I think there are two possibilities:

1. eric has never been to sa or has only visited it a few times

2. he is south african, but one lacking an eu passport, ancestry visa or the skills to allow him to emigrate-in my experience, such people (and there are quite a few) have this panglossian attitude mainly because they have no alternative.

the place is quite honestly, a mess. it is a developing country with a worse trade deficit than the uk, despite vast mineral wealth. the electricity infrastructure is a disgrace and crime is at levels unimaginable to your average brit (which is one reason I get so angry when i hear british people complaining about crime). socially there is very little reconciliation (as far as i can see) and i think the government has wasted a golden opportunity to emulate the policies of the BRICs over the last 15 years.

btw eric, lew geffen (i'm sure you know who he is) recently discussed the possibility of 40% falls (at the high end of the market) in the media.

Andre

Sorry to disappoint on both counts as above.

I am a South African who does have the necessary skills to live and work in London as I currently do, but I still go back to SA at least twice a year as I have an internet business there.

And yes, Lew Geffen did quote a 40% drop in property prices but he got castigated by the entire real estate industry for 'scaremongering'.

South Africa is 6 months behind the UK (in my opinion) as far as the housing market is concerned. I have lived there for over 25 years, but choose to live in the UK instead, because I do have a family. It is a stunning country, totally ruined by politicians over the last century. There will be a time to buy property there, but it isnt now because of the current turmoil, which has no end in sight.

I go back once a year and have close family still living there...nobody I know isnt making plans to emigrate. The ones that are left behind are the ones that cant emigrate, and they will be the forced sellers getting hit by the rising interest rate and fuel prices, the same as we see here in the UK.